Circle Warns EU Stablecoin Rules May Require Dual Licensing by 2026
Regulatory Challenges for Stablecoin Providers in Europe
Patrick Hansen from Circle highlights potential compliance issues due to overlapping European crypto regulations, impacting stablecoin service providers.
- Hansen warns of significant compliance burdens resulting from conflicts between MiCA and the Payment Services Directive.
- The overlap may require dual licensing for e-money token activities by March 2026, leading to operational challenges.
- This situation contradicts MiCA's goal of providing unified rules without duplicating existing requirements.
- Circle CEO Jeremy Allaire supports Hansen's view, emphasizing the need for regulatory simplicity.
Potential Consequences and Solutions
- Crypto-Asset Service Providers might exit custody and transfer services if forced to obtain dual authorizations.
- This could hinder euro stablecoin adoption and redirect users to unbacked crypto assets.
- Hansen suggests extending the transition period for current providers to at least 2027 and amending the Payment Services Directive to align with MiCA.
- Firms like Gate Technology have secured MiCA licenses to comply with the new framework.